07

A public-interest banking system

Banks are vital to life in the modern economy. They are where we deposit our salaries and store our life savings. They provide the credit we need to make urgent repairs to a car or pay for an unexpected trip when a parent falls ill. And if we wish to buy a family home or start a family business, access to credit gives us the autonomy to be the architects of our own lives.

Despite the systemic importance of banking, control of our financial system has been handed off to large for-profit corporations. They’ve exploited their privileged position by gouging their customers with exorbitant fees, selling shonky insurance and handing out negligent, self-serving financial advice – all the while accumulating more and more of our money for themselves. And anyone whose current income or previous financial mistakes paints them as a risk to banks’ profits is refused service, and cast out into the unforgiving world of criminal loan sharks and predatory payday loans.

It is high time Australians had access to a Public Interest Bank that would operate both online and through existing government infrastructure such as our post offices.

The government already provides public financing in many areas of the economy. It acts as a low-cost lender for education through the Higher Education Loan Programme (HECS-HELP), and provides access to cheap credit for renewables projects through the Clean Energy Finance Corporation. It’s time to take things one step further.

A Public Interest Bank would provide many benefits:

A low-cost, secure destination for people’s cash. Without the need to make a profit, a Public Interest Bank can put people first: providing a safe, no-fee destination to store people’s salaries and savings without being gouged by corporate banks.

Affordable emergency lending service for those most in need. Having a low income, or making a credit mistake 10 years ago, shouldn’t prevent people with a sensible plan from accessing credit to fix their car so they can get to work, or make an interstate trip when a loved one passes away.

Priority lending for social good. A Public Bank could encourage social impact investments that improve labour standards, public housing, environmental conditions or another community need.

Become the standard for banking services. By being accessible to all, the Public Bank will finally force private banks to lift their service and ethical standards to compete with a no-fee, fully-guaranteed destination for deposits.

Public economic infrastructure in public hands

The payments system is the fundamental economic infrastructure that allows funds to be stored and transferred between people and businesses in the economy. When banks were privatised, the payments system was privatised too, and the banks' control of it has given them unwarranted structural importance to the economy. They're too big, and too important, to be allowed to fail – and they know it.

The banks have parlayed their control over the vital payment infrastructure into a unique privileged status in the economy. Their deposits are formally guaranteed by the government, and in times of crisis they are given unrestricted access to public funds. With this privileged status, they've taken risky bets on exotic financial products – pocketing huge profits and leaving the public to pick up the bill when the house of cards inevitably collapses.

As long as for-profit corporate banks are allowed control of the national payments system, they will be able to privatise their profits and socialise their losses. We need to bring the payments system back into public hands – and our economy back under our control.

This document was prepared on land belonging to the Gadigal people of the Eora nation. Its authors pay our respect to their elders past and present, and recognise that their sovereignty was never ceded. We also acknowledge that Aboriginal and Torres Strait Islander peoples throughout this land are engaged in centuries-long and ongoing struggles for sovereignty. Generations of genocide, dispossession and marginalisation have caused Aboriginal and Torres Strait Islander people to be disproportionately affected by economic, social and political inequality. This can only be overcome when they are returned self-determination over their land, cultures and lives. Future to Fight For is only a starting point. In compiling these policy suggestions, we have taken the unequivocal position that no future will be worth fighting for unless the vision we work towards – and the fight to realise it – supports the self-determination of Aboriginal and Torres Strait Islander peoples. The following policies should be read with the understanding that Aboriginal and Torres Strait Islander sovereignty is critical if we are to achieve progressive change.

WARNING: Aboriginal and Torres Strait Islander people are warned that this website may contain images or names of deceased persons.